Qantas 2015 Annual Report Download

Download and view the complete annual report

Please find the complete 2015 Qantas annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 106

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106

QANTAS ANNUAL REPORT 2015
A STRONG, SUSTAINABLE FUTURE

Table of contents

  • Page 1
    A STRONG, SUSTAINABLE FUTURE Q A N TA S A N N U A L R E P O R T 2 015

  • Page 2
    ... TA S A NNUA L REPOR T 2015 CONTENTS QANTAS ANNUAL REPORT Chairman's Report CEO's Report Financial Overview Board of Directors Review of Operations Corporate Governance Statement Directors' Report Financial Report Shareholder Information Financial Calendar and Additional Information 02 04 06 08 11...

  • Page 3
    ... of the Group's businesses made a good contribution to the overall performance and returned its cost of capital. Operating cash flow in 2014/2015 was a healthy $2 billion. Proposed Capital Return Qantas returned to an optimal capital structure in 2014/2015, having reduced debt, increased liquidity...

  • Page 4
    ...limited capital invested in Europe but extensive access to European markets through the Emirates partnership. Overall, the Group's diverse brands, revenue streams and customer base are significant competitive advantages to build on in 2015/2016. Once again, I pay tribute to the Group's employees for...

  • Page 5
    ... L REPOR T 2015 CEO'S REPORT Qantas' underlying profit before tax of $975 million was a turnaround of $1.6 billion compared with 2013/2014 - including the best secondhalf performance in our history. I'm incredibly proud of our people, who have driven the Qantas Transformation program forward with...

  • Page 6
    ...N TA S A NNUA L REPOR T 2015 A Sustainable Future The goal of the Qantas Transformation program is to build a strong, sustainable business for the long-term. And today more than ever, sustainability in the broadest sense of the word is central to our strategy, our values and our aspirations for the...

  • Page 7
    ... the year and saw Qantas meet its target of paying down more than $1 billion of net debt3. As a result, Qantas has reached its optimal capital structure - enabling it to resume shareholder returns. 1 Financial Position The Group's leverage metrics are now within an investment-grade target range...

  • Page 8
    ... the Group's invested capital over time, and returning surplus capital to shareholders, we will continue to create long-term value for our shareholders. Financial Framework Aligned with Shareholder Objectives Enhancing long-term shareholder value 1 MAINTAINING AN OPTIMAL CAPITAL STRUCTURE Target...

  • Page 9
    ... held roles in sales, marketing, IT, network planning, operations research, revenue management and fleet planning. Age: 49 Maxine Brenner BA, LLB Independent Non-Executive Director Maxine Brenner was appointed to the Qantas Board in August 2013. She is a Member of the Remuneration Committee and the...

  • Page 10
    ... Chairman of its Change & Technology Committee and a Member of its Audit and Governance and HR Committees. She is also a Director of the Australian Foundation Investment Company Limited, Special Broadcasting Service, Melbourne Business School and Cricket Australia, and a Member of the ASIC Director...

  • Page 11
    ... Qantas Board in June 2008. She is Chair of the Audit Committee, a Member of the Safety, Health, Environment and Security Committee and a Member of the Nominations Committee. Ms Ward is a Director of Caltex Australia Limited, a number of Brookfield Multiplex Group companies, and the Sydney Children...

  • Page 12
    ... Committee and the Board of Directors, for the purpose of assessing the performance of the Group. The primary reporting measure of the Qantas International, Qantas Domestic, Jetstar Group, Qantas Loyalty and Qantas Freight operating segments is Underlying Earnings Before Net Finance Costs and Tax...

  • Page 13
    ... and ease of travel including auto check-in on mobile for Qantas Domestic and next-gen online retailing and boarding at Jetstar UNDERLYING PBT The Qantas Group's full-year 2014/2015 Underlying PBT increased to $975 million, compared to an Underlying Loss Before Tax of $646 million in 2013/2014. The...

  • Page 14
    ...reporting periods. Comparable unit cost is calculated as Underlying PBT less passenger revenue and fuel, adjusted for the impact of the Qantas International fleet write-down, changes in discount rates, changes in foreign exchange rates, share of net loss of investments accounted for under the equity...

  • Page 15
    ... T 2015 REVIEW OF OPERATIONS CONTINUED FOR THE YEAR ENDED 30 JUNE 2015 Segment Performance Summary June 2015 $M June 2014 $M Change $M Change % Qantas Domestic Qantas International Qantas Freight Jetstar Group Qantas Loyalty Corporate Unallocated/Eliminations Underlying EBIT1 Net finance costs...

  • Page 16
    ... to Virgin Australia including mainline domestic and regional operations. Virgin's assumed domestic unit cost is based on Qantas' internal estimates and published competitor data 25 Compared to first-half ended 31 December 2013, annualised and assuming steady foreign exchange rates, capacity and...

  • Page 17
    ... debt or payments to shareholders 32 Net on balance sheet debt includes interest-bearing liabilities and the fair value of hedges related to debt reduced by cash and cash equivalents and aircraft security deposits 33 Net debt including operating lease liability under the Group's Financial Framework...

  • Page 18
    ... investment in the customer experience and service training for our people, customer advocacy measured by Net Promoter Score increased to a record41 in 2014/2015. 36 37 38 39 Includes Jetstar Asia, Qantas Freight and Network Aviation and excludes aircraft owned by Jetstar Japan, Jetstar Hong Kong...

  • Page 19
    ... inclusive of Transformation benefits and foreign exchange movements 44 Comparable unit cost is calculated as Underlying EBIT less passenger revenue and fuel adjusted for the impact of the Qantas International fleet write-down, changes in discount rates, changes in foreign exchange rates, changes in...

  • Page 20
    ... performance from the International Freighter network. Stronger cargo load factors helped offset yield22 reductions in a very competitive domestic freight market. 49 Skytrax World Airline Awards 2015 50 Qantas Loyalty record Underlying EBIT result compared to prior periods normalised for changes...

  • Page 21
    ..., together with other aircraft associated property, plant and equipment, inventory and other related costs 57 The write-off of the Jetstar Hong Kong business includes the impairment of the investment, write-off of deferred costs and the Group's share of net losses for the year ended 30 June 2015 20

  • Page 22
    ... debt to achieve credit metrics in-line with a BBB/BBB- rating (investment grade). As a result of improved earnings through the achievement of milestones under the Qantas Transformation program, the Group is now within the target optimal capital structure range. At 30 June 2015, the Group's leverage...

  • Page 23
    ... at 2014/2015 Board and Committee Meetings is detailed on page 24 of the 2015 Annual Report. THE BOARD PROMOTES ETHICAL AND RESPONSIBLE DECISION-MAKING The Board has established a corporate governance framework, comprising Non-Negotiable Business Principles (Principles) and Group Policies, which...

  • Page 24
    ...Group has an appropriate corporate governance structure. Within that overall strategy, Management has designed and implemented a risk management and internal control system to manage Qantas' material business risks. During 2014/2015, the two Board committees responsible for oversight of risk-related...

  • Page 25
    ...program. There were no significant changes in the nature of the activities of the Qantas Group during the year. DIVIDENDS No final dividend will be paid in relation to the year ended 30 June 2015 (2014: nil final dividend). No interim dividend was paid during the year. DIRECTORS' MEETINGS The number...

  • Page 26
    ... entity for the Multiplex SITES Trust, which is a listed Australian registered managed investment scheme. QUALIFICATIONS AND EXPERIENCE OF EACH PERSON WHO IS A COMPANY SECRETARY OF QANTAS AS AT 30 JUNE 2015 Andrew John Finch - Company Secretary Appointed as Company Secretary on 31 March 2014...

  • Page 27
    ... select Qantas Group Executives under the Qantas Deferred Share Plan (DSP) and the Qantas Employee Share Plan (ESP). Refer to pages 36 to 37 for further details. The following table outlines the movements in Rights during the year: Number of Rights Performance Rights Reconciliation 2015 2014 Rights...

  • Page 28
    ... Date Value at Grant Date 2015 Net Vested 2015 Unvested 2015 Total 2014 Net Vested 2014 Unvested 2014 Total 2004/05 Performance Rights Plan 2005 Performance Rights Plan 2006 Performance Rights Plan 2012-2014 Long Term Incentive Plan 2012-2014 Long Term Incentive Plan 2013-2015 Long Term Incentive...

  • Page 29
    ... Remuneration Report. The Board remains committed to a remuneration framework that is aligned to the Qantas Group strategy, is performance based, motivates and appropriately rewards Management, meets shareholders' requirements and encourages decision-making that is focused on the longer-term. Paul...

  • Page 30
    ...-2015 LTIP, 2014-2016 LTIP and 2015-2017 LTIP are the relative Total Shareholder Return (TSR) performance of Qantas compared to: - companies with ordinary shares included in the ASX100 - an airline peer group (Global Listed Airlines) Long Term Incentive Referred to as the Long Term Incentive Plan...

  • Page 31
    ... Board assesses performance against financial, safety and other key business measures as part of a balanced scorecard, as outlined on page 38. The STIP award paid to the CEO for 2014/2015 was determined primarily by management's delivery of the very strong financial results as well as a high level...

  • Page 32
    ...Long Term Incentive - 2013-2015 LTIP Outcome At the 2012 Annual General Meeting (AGM), shareholders approved an award of 2,575,000 Rights to the CEO under the 2013-2015 LTIP. The vesting of these Rights was subject to Qantas TSR performance compared to two peer groups (companies with ordinary shares...

  • Page 33
    ... to as the Long Term Incentive Plan (LTIP) The 'At Target' pay for the CEO and Executive KMP is set with reference to external market data including comparable roles in other listed Australian companies and in international airlines. The primary benchmark is a revenue-based peer group of other...

  • Page 34
    ... Financial Officer to 28 February 2015 Lesley Grant CEO Qantas Loyalty Jayne Hrdlicka CEO Jetstar Group Total Former Executives Simon Hickey 9 Former CEO Qantas International to 28 February 2015 Lyell Strambi9 Former CEO Qantas Domestic to 28 February 2015 1 2 3 4 5 6 7 8 9 2015 2014 2015 2014 2015...

  • Page 35
    ... Other Benefits $'000s Base Pay STIP Cash (Cash)1,2 Bonus1 Deferred Shares3 Rights Total Current Executives Alan Joyce Chief Executive Officer Tino La Spina7 Chief Financial Officer from 1 March 2015 Andrew David7 CEO Qantas Domestic from 1 March 2015 Gareth Evans CEO Qantas International from...

  • Page 36
    ... The Short Term Incentive Plan (STIP) is the annual 'at risk' incentive plan for members of Qantas Executive Management. Each year these Executives may receive an award that is a combination of cash and restricted shares to the extent that the Plan's performance conditions are achieved. The Board...

  • Page 37
    ... group (Global Listed Airlines) These Rights will only vest in full if Qantas' TSR performance ranks at or above the 75th percentile compared to both the ASX100 and the Global Listed Airlines peer groups. Qantas' financial framework targets top quartile TSR performance relative to ASX100 companies...

  • Page 38
    ...government involvement, representation of Qantas' key markets and continuing financial performance. For the 2014-2016 LTIP and 2015-2017 LTIP, the Global Listed Airlines peer group contains the following Airlines: Air Asia, Air France/ KLM, Air New Zealand, All Nippon Airways, International Airlines...

  • Page 39
    ...achieved for some Jetstar brands. Qantas Domestic continued to be the most on-time of the major domestic airlines for 2014/2015, with over 88.3 per cent of flights on-time. Qantas Domestic and Jetstar also maintained their network and frequency advantage in the Australian domestic market. Strategic...

  • Page 40
    ...Qantas International, Qantas Frequent Flyer, Jetstar Australia Domestic, Jetstar Australia Long Haul, Jetstar Asia, Jetstar Japan and Jetstar Pacific. Qantas Domestic targets being the most on-time major Australian domestic airline. Therefore a target comparing on-time performance of Qantas Domestic...

  • Page 41
    ... has performed a review of the STIP and LTIP terms and conditions and has modified them to better enable Qantas to clawback remuneration in accordance with the policy. These changes will apply to all new plans from 1 July 2015. Employee Share Trading Policy The Qantas Code of Conduct and Ethics...

  • Page 42
    ... comparable roles in other listed Australian companies and international airlines. The 'At Target' STIP and LTIP opportunities for the CEO and KMP are detailed in the Summary of Key Contract Terms on page 40. For 2014/2015, the Board changed the remuneration mix for the CEO and Executive Management...

  • Page 43
    ... by the Qantas Group's chief operating decision-making bodies, being the Chief Executive Officer, Group Management Committee and the Board of Directors, for the purpose of assessing the performance of the Group. Statutory Profit After Tax for 2014/2015 was $560 million (2014: ($2.8) billion, 2013...

  • Page 44
    ... of equity instruments granted as remuneration to the KMP by Qantas. Non-Executive Directors do not receive any remuneration in the form of share-based payments, although they may salary sacrifice a portion of their Directors' fees to purchase shares. (i) Short Term Incentive Plan (STIP) Number of...

  • Page 45
    ... achieved at the end of performance periods (iii) Performance Share Plan (PSP) Number of Shares Key Management Personnel 1 July Commenced as KMP Granted Forfeited Transferred Ceased Employment 30 June Gareth Evans Lesley Grant Simon Hickey1 ceased as KMP 28 February 2015 2015 2014 2015 2014 2015...

  • Page 46
    ... on an annual fee of $27,500. Non-Executive Directors do not receive any performance-related remuneration. Overseas-based Non-Executive Directors are paid a travel allowance when travelling on international journeys of greater than six hours to attend Board and Committee Meetings or Board-related...

  • Page 47
    ... YEAR ENDED 30 JUNE 2015 REMUNERATION REPORT (AUDITED) CONTINUED Remuneration for the Year Ended 30 June 2015 - Non-Executive Directors Short-term Employee Benefits Base Pay (Cash) Non-cash Benefits Post-employment Benefits Travel Sub-total Total Sub-total Superannuation Leigh Clifford Chairman...

  • Page 48
    ...an officer of Qantas. The Directors and the Company Secretaries listed on page 25 and individuals who formerly held any of these positions have the benefit of the indemnity in the Qantas Constitution. Members of Qantas' Executive Management team and certain former members of the Executive Management...

  • Page 49
    ... code of professional conduct in relation to the audit. KPMG Sydney 28 August 2015 Duncan McLennan Partner KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity...

  • Page 50
    ...Reporting Entity Critical Accounting Estimates and Judgements Underlying Profit/(Loss) Before Tax, Operating Segments and Return on Invested Capital Other Revenue/Income and Other Expenditure Net Finance Costs Income Tax Earnings/(Loss) per Share Auditor's Remuneration Shareholder Distributions Cash...

  • Page 51
    ... THE YEAR ENDED 30 JUNE 2015 Qantas Group Notes 2015 $M 2014 $M REVENUE AND OTHER INCOME Net passenger revenue Net freight revenue Other Revenue and other income EXPENDITURE Manpower and staff related Fuel Aircraft operating variable Depreciation and amortisation Impairment of cash generating unit...

  • Page 52
    ...FOR THE YEAR ENDED 30 JUNE 2015 Qantas Group 2015 $M 2014 $M Statutory profit/(loss) for the year Items that are or may be reclassified to profit or loss Effective portion of changes in fair value of cash flow hedges, net of tax Transfer of hedge reserve to the Consolidated Income Statement, net of...

  • Page 53
    ... for sale Other Total current assets NON-CURRENT ASSETS Receivables Other financial assets Investments accounted for under the equity method Property, plant and equipment Intangible assets Deferred tax assets Other Total non-current assets Total assets CURRENT LIABILITIES Payables Revenue received...

  • Page 54
    ...of tax Recognition of effective cash flow hedges on capitalised assets, net of tax Time value of options, net of tax Defined benefit actuarial gains, net of tax Foreign currency translation of controlled entities Foreign currency translation of investments accounted for under the equity method Total...

  • Page 55
    ... Income Statement, net of tax Recognition of effective cash flow hedges on capitalised assets, net of tax Defined benefit actuarial gains, net of tax Foreign currency translation of controlled entities Foreign currency translation of investments accounted for under the equity method Total other...

  • Page 56
    ... and related costs Interest received Interest paid Dividends received from investments accounted for under the equity method Income taxes paid Net cash from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Payments for property, plant and equipment and intangible assets Interest paid and...

  • Page 57
    ...of assessing the performance of the Group. The primary reporting measure of the Qantas Domestic, Qantas International, Qantas Freight, Jetstar Group and Qantas Loyalty operating segments is Underlying EBIT. The primary reporting measure of the Corporate segment is Underlying PBT as net finance costs...

  • Page 58
    ... ROIC %4 1 Qantas Domestic, Qantas International, Qantas Freight, Jetstar Group, Qantas Loyalty and Corporate are the operating segments of the Qantas Group. 2 Share of net profit/(loss) of investments accounted for under the equity method excluding share of losses in Jetstar Hong Kong which have...

  • Page 59
    ... business at prices that approximate market prices. Qantas Loyalty does not derive net profit from inter-segment transactions relating to frequent flyer point issuances and redemptions. Share of net profit/(loss) of investments accounted for under the equity method Underlying EBITDAR Share of net...

  • Page 60
    ... together with other aircraft associated property, plant and equipment, inventory and other related costs. 2 The write-off of the Jetstar Hong Kong Business includes the impairment of the investment, write-off of deferred costs and the Group's share of net losses for the year ended 30 June 2015. 59

  • Page 61
    ...Qantas Group 2015 $M 2014 $M ROIC EBIT Underlying EBIT Add: Non-cancellable aircraft lease rentals Less: Notional depreciation ROIC EBIT ii. Average Invested Capital Invested Capital includes the net assets of the business other than cash, debt, other financial assets/(liabilities) and tax balances...

  • Page 62
    ...-aircraft operating lease rentals Property Marketing and advertising Redundancies2 Inventory write-off Contract work materials Ineffective and non-designated derivatives Net gain on sale of controlled entity and related assets Employee benefit discount rate and other assumption changes Other Total...

  • Page 63
    ... REPOR T 2015 5. NET FINANCE COSTS Qantas Group 2015 $M 2014 $M FINANCE INCOME Interest income on financial assets measured at amortised cost Interest income from investments accounted for under the equity method Unwind of discount on receivables Total finance income FINANCE COSTS Interest expense...

  • Page 64
    ... TAX Statutory profit/(loss) before income tax (expense)/benefit Income tax (expense)/benefit using the domestic corporate tax rate of 30 per cent Adjusted for: Non-assessable dividends from controlled entities Non-deductible share of net loss for investments accounted for under the equity method...

  • Page 65
    ... years The ability to utilise the franking credits is dependent upon there being sufficient available profits to declare dividends. 10. CASH AND CASH EQUIVALENTS Qantas Group 2015 $M 2014 $M Cash balances Cash at call Short-term money market securities and term deposits Total cash and cash...

  • Page 66
    ... assets was determined with reference to recent sale transactions. 14. INVESTMENTS ACCOUNTED FOR UNDER THE EQUITY METHOD Qantas Group 2015 $M 2014 $M Carrying amount of investments accounted for under the equity method Share of losses of investments accounted for under the equity method Share...

  • Page 67
    ... of property, plant and equipment and transfers to other balance sheet accounts. Other includes foreign exchange movements and non-cash additions including those relating to finance leases. Aircraft and engines include finance-leased assets with a net book value of $1,796 million (2014: $1,933...

  • Page 68
    ...) Qantas Group 2015 $M 2014 $M Deferred tax assets Total deferred tax assets Recognised in the Consolidated Income Statement 333 333 Recognised in Other Comprehensive Income 548 548 Qantas Group 2015 $M Opening Balance Closing Balance Reconciliations Inventories Property, plant and equipment...

  • Page 69
    ... THE YEAR ENDED 30 JUNE 2015 17. DEFERRED TAX ASSETS/(LIABILITIES) CONTINUED Qantas Group 2014 $M Opening Balance Recognised in the Consolidated Income Statement Recognised in Other Comprehensive Income Closing Balance Reconciliations Inventories Property, plant and equipment and intangible assets...

  • Page 70
    ... liabilities relate to specific financings of aircraft and engines and are secured by the aircraft to which they relate (refer to Note 15). During the year, there were non-cash financing activities relating to additions of property, plant and equipment under finance leases of $30 million (2014: $130...

  • Page 71
    ...NOTES TO THE FINANCIAL STATEMENTS CONTINUED FOR THE YEAR ENDED 30 JUNE 2015 22. PROVISIONS Qantas Group 2015 $M 2014 $M CURRENT Annual leave Long service leave Redundancies and other employee benefits Total current employee benefits Onerous contracts Make good on leased assets Insurance, legal and...

  • Page 72
    ...compensation plans. As at 30 June 2015, 3,512,952 (2014: 8,230,499) shares were held in trust and classified as treasury shares. Qantas Group 2015 $M 2014 $M RESERVES Employee compensation reserve Hedge reserve (refer to Note 26(C)) Foreign currency translation reserve Defined benefit reserve Total...

  • Page 73
    ...a market estimate of the weighted average cost of capital of the Qantas Group (2014: 10.5 per cent per annum). The discount rate is based on the risk-free rate for 10 year Australian Government Bonds adjusted for a risk premium to reflect both the increased risk of investing in equities and the risk...

  • Page 74
    ... Statement of Comprehensive Income, Consolidated Balance Sheet and the Consolidated Statement of Changes in Equity. (A) OTHER FINANCIAL ASSETS AND LIABILITIES Qantas Group 2015 $M 2014 $M NET OTHER FINANCIAL ASSETS/(LIABILITIES) Derivatives Designated as cash flow hedges1 Designated as fair value...

  • Page 75
    ... liabilities Total (C) HEDGE RESERVE At 30 June 2015, the Qantas Group held various types of derivative financial instruments that were designated as cash flow hedges of future forecast transactions. These were hedging of: - Future AUD fuel costs and foreign currency operational payments by exchange...

  • Page 76
    ... hedged item. The Qantas Group early adopted AASB 9 (2013) with a date of initial application of 1 July 2014. For the year ended 30 June 2014, the amounts recognised in the Consolidated Income Statement reflect hedge ineffectiveness on changes in the fair value of any derivative instrument in a cash...

  • Page 77
    ... financing fees and lease benefits Net (gain)/loss on disposal of property, plant and equipment Net gain on sale of controlled entity and related assets Share of net loss of investments accounted for under the equity method Other items Cash items not included in profit/(loss) relating to operating...

  • Page 78
    ...recognised. 29. COMMITMENTS (A) FINANCE LEASE AND HIRE PURCHASE COMMITMENTS Qantas Group 2015 $M 2014 $M AS LESSEE Finance lease and hire purchase liabilities included in the Consolidated Financial Statements Aircraft and engines - payable: Not later than one year Later than one year but not later...

  • Page 79
    ... T 2015 NOTES TO THE FINANCIAL STATEMENTS CONTINUED FOR THE YEAR ENDED 30 JUNE 2015 29. COMMITMENTS CONTINUED B) OPERATING LEASE COMMITMENTS Qantas Group 2015 $M 2014 $M AS LESSEE Non-cancellable operating lease commitments not provided for in the Consolidated Financial Statements Aircraft and...

  • Page 80
    ... IN NET DEFINED BENEFIT (ASSET)/LIABILITY Qantas Group Present Value of Obligation $M 2015 2014 Fair Value of Plan Assets $M 2015 2014 Net Defined Benefit (Asset)/ Liability $M 2015 2014 Balance as at 1 July Included in the Consolidated Income Statement Current service cost Past service cost1...

  • Page 81
    ... THE FINANCIAL STATEMENTS CONTINUED FOR THE YEAR ENDED 30 JUNE 2015 31. SUPERANNUATION CONTINUED  LN ASSETS The major categories of plan assets as a percentage of total plan assets of the Group's defined benefit plans are as follows: Qantas Group 2015 % 2014 % Australian equity1 Global equity...

  • Page 82
    ... INCOME STATEMENT Consolidated 2015 $M 2014 $M Revenue and other income Expenditure Statutory profit/(loss) before income tax expense and net finance costs Net finance costs Statutory profit/(loss) before income tax expense Income tax (expense)/benefit Statutory profit/(loss) for the year Retained...

  • Page 83
    ...BALANCE SHEET Consolidated 2015 $M 2014 $M CURRENT ASSETS Cash and cash equivalents Receivables Other financial assets Inventories Assets classified as held for sale Other Total current assets NON-CURRENT ASSETS Receivables Other financial assets Investments Property, plant and equipment Intangible...

  • Page 84
    ... secured aircraft facility to Jetstar Hong Kong to facilitate the acquisition of aircraft. Transactions and balances with investments accounted for under the equity method are included in the Consolidated Financial Statements as follows: Qantas Group 2015 $M 2014 $M Revenue and other income Finance...

  • Page 85
    ... years. To the extent a foreign exchange gain or loss is incurred, and the cash flow hedge is deemed effective, this is deferred until the net revenue is realised. As at 30 June 2015, total unrealised exchange gains on hedges of net revenue designated to service long-term debt were $12 million (2014...

  • Page 86
    ... market movements Profit Before Tax Qantas Group $M 2015 2014 Equity (Before Tax) 2015 2014 100bps increase in interest rates Variable rate interest-bearing instruments (net of cash) Derivatives designated in a cash flow hedge relationship Derivatives and fixed rate debt in a fair value hedge...

  • Page 87
    ... CONTINUED FOR THE YEAR ENDED 30 JUNE 2015 34. FINANCIAL RISK MANAGEMENT CONTINUED The table below sets out the maximum exposure to credit risk as at 30 June 2015: Qantas Group Notes 2015 $M 2014 $M On Consolidated Balance Sheet Cash and cash equivalents Receivables Other financial assets 10 11 26...

  • Page 88
    ...PARENT ENTITY DISCLOSURES FOR Q ANTAS AIRWAYS LIMITED (Q ANTAS) (A) CONDENSED INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2015 Qantas 2015 $M 2014 $M Revenue and other income Expenditure Statutory profit/(loss) before income tax expense and net finance costs Net finance costs Statutory profit/(loss...

  • Page 89
    ... ENDED 30 JUNE 2015 Qantas 2015 $M 2014 $M Statutory profit/(loss) for the year Effective portion of changes in fair value of cash flow hedges, net of tax Transfer of hedge reserve to the Income Statement, net of tax Recognition of effective cash flow hedges on capitalised assets, net of tax Time...

  • Page 90
    ... Statement of Changes in Equity and Consolidated Balance Sheet. iv. Loss of Control When the Group loses control over a controlled entity, it derecognises the assets and liabilities of the controlled entity and any related non-controlling interest and other components of equity. Any resulting...

  • Page 91
    ... dates the fair value was determined. ii. Foreign Operations Assets and liabilities of foreign operations, including controlled entities and investments accounted for under the equity method, are translated to the functional currency of the Group at the rates of exchange prevailing at balance date...

  • Page 92
    ... commitment (fair value hedges), or hedges of highly probable forecast transactions (cash flow hedges). At the inception of the transactions, the Qantas Group documents the relationship between hedging instruments and hedged items, including the risk management objective and strategy for undertaking...

  • Page 93
    .... The Qantas Group uses a variety of methods and input assumptions that are based on market conditions existing at balance date. The different methods of estimating the fair value of these items have been defined in the Consolidated Financial Statements as follows: Level 1: quoted prices (unadjusted...

  • Page 94
    ... unamortised balance being held in lease and hire purchase liabilities. viii. Dividend Revenue Dividends are recognised as revenue when the right to receive payment is established. Dividends from foreign entities are recognised net of withholding tax. ix. Other Revenue/Income Income resulting from...

  • Page 95
    ... and intangible assets and compared to net cash inflows for the CGU. Estimated net cash flows used in determining recoverable amounts are discounted to their net present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to...

  • Page 96
    ... values are reviewed annually and reassessed having regard to commercial and technological developments, the estimated useful life of assets to the Qantas Group and the long-term fleet plan. iv. Maintenance and Overhaul Costs An element of the cost of an acquired aircraft (owned and finance-leased...

  • Page 97
    ... the Qantas Group, which differentiate these aircraft from owned assets. iii. Operating Leases Rental payments under operating leases are charged to the Consolidated Income Statement on a straight-line basis over the term of the lease. Any gains and losses arising under sale and operating leaseback...

  • Page 98
    ...on the divisions which relate to accumulation members and defined benefit members. Only defined benefit members are included in the Qantas Group's net obligation calculations. The calculation estimates the amount of future benefit that employees have earned in return for their service in the current...

  • Page 99
    ... a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised in the Consolidated Income Statement. The discount rate used is the Corporate Bond rate which has a maturity date that approximates the terms of Qantas obligations...

  • Page 100
    ... equity, net of any related income tax benefit. ii. Repurchase of Share Capital When share capital recognised as equity is repurchased, the amount of the consideration paid, including directly attributable costs is recognised as a deduction from equity. iii. Treasury Shares Shares held by the Qantas...

  • Page 101
    .... Qantas is assessing the potential impact on the Consolidated Financial Statements resulting from the application of AASB 15 for the financial year ending 30 June 2019. AASB 9 Financial Instruments (AASB 9 (2014)) AASB 9 (2014) amends AASB 9 (2013) to include a new expected credit loss model...

  • Page 102
    ... the Remuneration Report set out on pages 28 to 46 in the Directors' Report, are in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the financial position of the Qantas Group as at 30 June 2015 and of its performance for the financial year ended on that date...

  • Page 103
    ... of the Qantas Group's financial position as at 30 June 2015 and of its performance for the year ended on that date; and ii. complying with Australian Accounting Standards and the Corporations Regulations 2001. b. The Financial Report also complies with International Financial Reporting Standards as...

  • Page 104
    ... L REPOR T 2015 SHAREHOLDER INFORMATION The shareholder information set out below was applicable as at 24 July 2015. TWENTY LARGEST SHAREHOLDERS Shareholders Ordinary Shares Held % of Issued Shares 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Total HSBC Custody Nominees (Australia) Limited...

  • Page 105
    ... online through Qantas' share registry, Link Market Services, by logging on at www. linkmarketservices.com.au, where you will have the option to: - - - - view your holding balance; retrieve holding statements; review your dividend payment history; and access shareholder forms. REGISTERED OFFICE...

  • Page 106
    Q ANTAS AIRWAYS LIMITED ABN 16 009 661 901